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Home>Courses>Risk & Money Management>Lesson 3 of 7

Position sizing

How much to trade, so a single loss can never sink you.

Risk & Money Management·Lesson 3 of 7

All lessons

By the end of this lesson you'll be able to:

  • 01Define position sizing
  • 02Size a trade from a fixed risk
  • 03Explain why size beats entry
1

Step 1 · Read the guide

Read the guide first

Everything the quiz asks is covered in the linked guide. Read it, then answer the questions below.

What Is Position Sizing in Trading? A Complete Guide to Capital Preservation
Key terms
Position SizingRisk ManagementStop LossLeverage

Step 2 · Take the quiz

Quick check

10 questions

Answer all 10, then check. Wrong answers show a hint and a link back to the guide.

  1. Question 01

    What does position sizing decide?

  2. Question 02

    To size a trade correctly, what do you start from?

  3. Question 03

    $10,000 account, risk 1%, stop 50 pips, $1 per pip per mini lot. How many mini lots?

  4. Question 04

    $5,000 account, risk 2%, stop 25 pips, $2 per pip per lot. Position size?

  5. Question 05

    Risk is fixed at $100. Trade A has a 20-pip stop; Trade B has a 100-pip stop. Size of B versus A:

  6. Question 06

    You double your account but keep 1% risk and the same stop distance. What should position size do?

  7. Question 07

    Your broker offers 500:1 leverage. How should it affect your position size?

  8. Question 08

    Why is using the same lot size on every trade a mistake?

  9. Question 09

    What does correct position sizing ensure?

  10. Question 10

    How is position sizing best described?

Answered 0 of 10 · pass 70% (7/10) to complete

Risk & Money Management3 of 7
  1. Risk management fundamentals
  2. The risk-reward ratio
  3. →Position sizing
  4. Stop loss and take profit
  5. Max drawdown and risk of ruin
  6. Money management and diversification
  7. Performance metrics: win rate, Sharpe, Sortino
  8. ⚑Final Assessment· 20 Q